Coffee Break Questions: How much rent can you afford to lose, how much stress can you afford to take on?

In Coffee Break Questions today, we are talking about Rent Protection, How much rent can you afford to lose, how much stress can you afford to take on? Is now the time to protect your rental investment income & your peace of mind? We think so and this is why.

Sometimes things go wrong – even when you’ve taken all measures to protect yourself when choosing your tenants, the best tenancies can still run into difficulties and not just with rent payments.

With the cost of living crisis continuing & the constant pressure on demand for rental properties, tenants are increasingly worried about their ability to sustain their current & future rent payments if anything were to change in their circumstances or the cost of living increases any further. Many tenants across the UK do not have even 1 months worth of outgoings in savings, and with rents still rising all over the UK the pressure on tenants household budgets is at an all-time high.

What if you need your property back through no fault of your tenants, they are paying rent, and looking after the property, but you need to sell or need the property for yourself or a family member. Stock levels are at record lows at present, meaning many tenants are simply not able to find a suitable new home within the standard 2 month notice period even though they are trying their hardest and are great candidates. There are simply too many tenants and not enough properties available, so Landlords are being left with no choice but to take the legal route to regain possession of their property, because the housing advice services at local councils, citizens advice bureau & housing charities are simply telling tenants, stay in your properties if you have nowhere else to go, wait to be evicted.

If any of this were to happen how well could you cope with that burden? If months without rent would cause you financial difficulties or the thought of having to engage legal representation to regain possession of your property and or rent arrears would cause you stress & worry, now more than ever could be the time to think about safeguarding your rental income and your peace of mind.

Let’s take a look at the facts……

• The average rent in our portfolio is currently £1215pcm,
• The average time of eviction in the UK currently stands at 8/10 months from serving notice to regaining possession
• The average cost of eviction via a solicitor is currently between £1300 – £2000, and if demand for these services goes up, inevitably, so will the cost.
• Meaning if your tenant stopped paying rent based on our current average, and it took you the lowest average time to regain possession through a solicitor it could cost you over £11,000
• Our 12-month, nil excess rent protection & legal expenses service costs from just £330 inc VAT per annum, which is an allowable expense against your rental income, at a fraction of the cost of the potential lost rent and just 25% of the lowest end of the legal expenses average, so even without rent arrears it is still a great cost saving if you were to need to regain possession via a court.

When considering rent protection & legal expenses services, there are a few things to note. A large proportion of rejected rent protection or legal expenses claims are turned down because the referencing criteria has not been met, so keeping the two elements within the same process in our opinion is an important factor when it comes to choosing which cover is best. Our service is in partnership with our referencing partners Goodlord, to ensure that the criteria are met. Not all are created equal in the world of protection, so if you are looking at different services, make sure they are offering a like-for-like basis as many only cover you for a fixed amount of time or have higher standard criteria for acceptance, excess amounts etc, most should provide a comparison chart with major competitors so you can easily see but of course, they may show competitors products that are not as good as theirs, so it’s worth creating a spreadsheet of your own with the main areas you want to protect so you can compare them side by side.

Any one who has worked with us, will know we only ever give what we believe to be our best advice for your protection, we are not here to sell you things because it suits us. We have always offered rent protection as a service for additional peace of mind for Landlords and have always believed it is a great product, but have never before advocated for its necessity as thankfully we have not had cause to, but we feel at this time we would not be serving Landlords correctly if we didn’t let you know that we think it would be prudent to, at least consider, this additional service for your existing and near future tenancies. “If it were our properties and income we would be taking rent protection where possible”.

On the whole we are very positive about the market and Property Investment hands down is still one of the best and most secure asset classes in this country, and across Berkshire & South Oxfordshire we enjoy a relatively stable economy with amazing job security and ever increasing reasons for people to want to live here. So by no means are we trying to paint a picture of doom and gloom, far from it, we are definitely glass half full people and know that most of you are too, and rightly so given the areas that we operate in and the client base that we serve. We just want to protect that glass so we can all continue living & working positively knowing that should the worst happen you are protected and we can get the best outcome for you in the quickest time with the least amount of stress.

We firmly believe most tenants don’t choose to not pay rent or not leave at the end of a notice period. The majority just have no choice and that must be an incredibly stressful position to be in, unfortunately, a protection solution for tenants is current beyond our control but we would absolutely love to see the insurance world offer tenants a solution that would mean they could protect their rental payments or pay for temporary accommodation should the worst happen to them, meaning they could stay in their homes or at least alleviate some of the stress of having to find a new one, but until that day all we can do is offer protection against the worst for property owners, which can often help alleviate some of the stress from the tenant as they are more able to engage in the process to try and find a solution if they know that you are at least protected.  One of the greatest benefits of our service is the expert team who along with ourselves will mediate with your tenants to try and find a suitable solution for all without the need for it to ever get to the stage of legal action and the tenants possibly losing their home.

We also have strong ideas about a fairer rental sector for all, but we will leave that for a future article or maybe even a podcast so watch this space!

If you would like to find out more about how our enhanced services can protect your new or existing tenancies please call or whatsapp us on 01189189211.

Terms and conditions apply, please note that the policy provided at all times belongs to Black & White Property Services Ltd, so we can offer you an enhanced service on tenancies that meet the eligibility criteria.